States Levy Wide Range of Taxes on Gasoline

Gasoline prices in the U.S. continue to average around $3.00 a gallon. Of that $3.00, 50 cents is tax paid by the consumer.

This total tax includes a flat federal excise tax of 18.4 cents per gallon, state gas taxes and depending on the state, sales taxes, local sales taxes, and a variety of fees. Gross receipts taxes paid at the wholesale level, which mean higher prices at the pump, are sometimes included in “gas tax” figures, although the consumer is often not aware of the tax.

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Connecticut, where gasoline is selling at $3.146 a gallon, trailing only California and Hawaii where distribution costs are high, does not include the gross receipts tax cost in it gas tax. The state legislature passed a bill in 2004 mandating four consecutive annual increases to this tax, which is estimated to have cost consumers 17 cents a gallon, in addition to the gas tax of 25 cents a gallon, the North Central Connecticut Journal Inquirer reports.

Florida’s gas tax is only 14.5 cents per gallon and residents pay less than the national average at the pump. The gas tax is comprised of a 10.5 cent sales tax and a 4 cent excise tax. But the state adds fees for environmental inspection purposes, water quality assurance, the Inland Protection Fund, the Coastal Protection Trust Fund and weights and measures inspections, according to gaspricewatch.com. The state also allows local governments to charge from 9.9 to 17.8 cents per gallon in taxes on gasoline.

The highest gas tax is paid in Wisconsin, where it is 32.1 cents per gallon, followed by New York at 31.9 cents per gallon. The Wisconsin tax is variable, based on an inflation index, gaspricewatch says. Consumers in Wisconsin pay $3.00 per gallon for gas.

New York’s gas tax includes 8 cents per gallon in excise tax, and unlike Connecticut, includes the 15.2 cents per gallon petroleum business tax (gross receipts tax), as well as a sales tax, a spill fee and a petroleum fee. New York’s total gas tax does not include county sales taxes, which may range from 3.25 percent to 4.75 percent.

Connecticut and New York require 10 percent ethanol in their gasoline, which also adds to the cost.

Drivers in Kentucky are paying the least for gasoline right now, according to fuelgaugereport.com -- $2.75 a gallon -- and that price includes 15 cents per gallon in gas tax and an additional supplemental highway use tax of 5 cents. Taxes are also levied in Kentucky on underground fuel tanks and special fuels, gaspricewatch says.

Ohioans pay $2.70 cents a gallon, with a gas tax of 25 cents. In South Carolina, gas tax revenues of 16 cents a gallon have lagged since the price of oil began to move upward, according to WSPA.com, and the price is $2.73.

States use the gas tax revenues to pay for maintaining their transportation systems, including public transportation, and many are considering introducing tolls as a means to meet the huge cost of maintaining their highways. Declining to raise the state’s gas tax, frozen at 21 cents a gallon since 1991, according to the Austin American Statesman, Texas Governor Rick Perry is considering tolls on highways and rural roads. Perry says that a 20 cent increase in the gas tax would not raise sufficient revenue over the long term, as Americans rely less on gasoline.

A 20 cents per gallon increase in the gas tax would cost the average taxpayer in Texas $100 a year, the statesman estimates. Commuting on a toll road five days a week and paying $2.00 each way for a year, would cost $1,000.

Some editorial writers, including Marc Fisher of the Washington Post, support an increase in the federal excise tax as a way of encouraging Americans to consider alternative sources of fuel and to lessen our dependence on foreign oil. Others point to Europe, where taxes average 60 percent of the cost of gasoline, the Christian Science Monitor reports. Drivers in Holland pay $7.13 a gallon. In Great Britain, the government takes 75 percent and raises the tax every year, although it has stopped doing so since 2005.